What is a journal entry?

A journal entry is a recording of a financial transaction in a ledger (or journal) that can be subsequently used for reconciliation and transfer to other official accounting records such as the intelligent general ledger. Often, journal entries are managed through general ledger software. A journal entry lists the transaction date, which account was affected, and the amounts involved, typically in a double-entry bookkeeping method. A journal entry provides an audit trail to analyze the effects of transactions on the company’s financial position and performance.